I have been posting about the animal rights movement and its possible impact on livestock production in the US. We have also been reporting on the ongoing pet-food contamination uproar (see this week's USFR).

What if the two issues began to overlap?

If you think of dogs and cats as members of the family, you might figure you could collect damages for pain and suffering if they were to die because of wrongdoing.

The law in California and many other states sees things differently. Pets are treated as personal property, like cars and computers.

But that could be changing, as contaminated pet food is believed to be responsible for the deaths of dozens of dogs and cats nationwide.

"You'll see a lot of pressure on legislators to remove liability barriers, to not see these animals as property but as entities like humans," said Jon Katz, the author of several books on the changing relationship between dogs and people. [More]

Once companion animals achieve "family" status, it could conceivably raise all animals' legal position, just by comparison. Not necessarily to companion status, but some vague slightly less non-human category. I don't want to seem Cassandra-like, but if we see hundreds of thousands of lawsuits over the pet food, those attorneys won't have to look far for their next targets.

To date, we have somehow managed to differentiate between companion animals and food animals.

The twentieth century has most certainly borne witness to the exploitation of animal resources upon a scale far grander than ever before. The most striking development - as animal rights activists are keen to point out - is the way in which the cleft between ourselves and agricultural animals has grown as these animals have been increasingly accorded the status of `machines', through the development of the intensive farming methods deemed necessary to meet ever-growing human food demands. Yet whilst the divide between ourselves and food-producing animals has continued to expand, our identification with and dependence upon the smaller, more cuddly species that we keep as pets has also grown. We increasingly keep pets to satisfy our emotional, rather than material, needs and seem to gain tactile comfort and trust from them which might not be found elsewhere in our modern lives. This development has led the birth of small animal medicine and the pet food industry, both of which have done increasingly booming business since 1945. However, even the seemingly innocuous family pet that lurks in our homes, gardens and public parks can be potentially detrimental to our health. For example, pet animal excrement is not only an environmental nuisance, but can also harbour unpleasant infections, such as toxoplasmosis and toxocara, which can seriously threaten human health. Pets can also expose people to a variety of bacterial infections and cause severe allergies. Rigorous animal management and veterinary controls greatly minimise the risks that pet animals pose to human health. Yet again providing evidence of the efficacy of the modern veterinary regime in reducing the potential risks posed by our intimacy with and exploitation of other species. [More]

I'm not sure that separation can persist. And this further convinces me that petting zoos are a really, really, bad idea for animal agriculture.

Thursday, March 29, 2007

Not America's first choice...

I stumbled across this throughly charming blog by chance, and before I'd noticed had read several months of entries. The narrative struck me as well voiced and written, certainly more than adequate to describe a way of life that would strike many as irresistible. (BTW, for another great rural writer of similar vein only funnier, check out Brent Olson) His farm is in a beautiful rural location, his family is adorable, and he has a mixture of cute animals to provide pictures and endless amounts of copy.

Another week has come and gone here on the farm. Madison has had me out digging flowers. Now that the truck is fixed and it’s warmer, we’ve been driving down to the creek a couple miles past the farm so the kids can skip rocks and that’s where Madison found her flowers. There are old home places along the banks of the creek and lots of them have flowers growing abundantly. The kids call it Lilly Valley. That means Dad gets the shovel those that we need at our house. Garett doesn’t get too into the flowers, so he browses around for other treasures or picks up trash. Kind of strange to pick up trash, but he does. He says people are littering and destroying the earth. Hard to argue with that. So usually we come home with flowers and trash. It’s good for the kids to get out in the woods.

It’s time for garden tilling to get busy. I tilled 3 on Friday afternoon. Don’t make a lot of money at it, but at least it helps buy fuel. At $2.60 a gallon I can use the help. I thought I would have some trouble starting the 6000 after running it out of fuel, but all I had to do was loosen the fuel prime pump and pump a few times and it took right off.

Notice two things:

The unapologetic product plugs for his sponsor. This is how the web is going to deliver bucks, I think. It is also how much of what you will read will be infused with marketing.

The pure attraction of the agrarian lifestyle, albeit attached to a full time job elsewhere. It is hard for even me not to envy this simpler, seemingly more rustic life.

I have written before that while I grew up on more nearly agrarian farm, by a series of choices we moved to become what I call industrial producers. I think it is not only appropriate for our farm, but essential to our national interest. America needs industrial agriculture to supply the enormous amounts of farm products it consumes, especially now we have decided to fuel the US from the farm. (I may not agree with this logic, but accept the reality).

But industrial producers need to keep in mind we are not America's first choice for farmers. This guy is. My guess is most folks feel I'm too individualistic, advantaged and obnoxious to deserve this great life. I don't blame others for this nearly instinctive reaction, but I also take seriously that I may have to defend my way of life from people who want to save farming from people like me.

We have peddled an agrarian image for so long, we have forgotten we don't match up. Still, the market will sort this choice out. In the end, image doesn't produce crops.

Feels like the the tide going out...Every now and then I think I detect a sea change in our business. Sometimes it pertains only to my farm, but sometimes it simply dawns on me agriculture is shifting course somewhat. This week's news gave me that same impression. Something different our way comes.And it's not just ethanol.The curious upper-end trends in food are being carried to the everyday consumer, not because they embrace them, but because the food industry is adopting them, and that is how nearly 50% of our food is delivered. The immediate example of this development is animal welfare concern by food retailers.

In what animal welfare advocates are describing as a “historic advance,” Burger King, the world’s second-largest hamburger chain, said yesterday that it would begin buying eggs and pork from suppliers that did not confine their animals in cages and crates. [More]

Obviously BK considers this to be a wise move to improve or protect their competitive position, but also consider that the executives making this decision are also more likely to be shopping at Whole Foods and ordering free-range chicken dishes when they eat out. Higher income consumers set food trends in more ways than simply by example.Cheap food is no longer enough. In fact, "cheap" has taken on a definite downscale connotation. The now widespread practice of selective conspicuous consumption - Manolo shoes with Lee jeans - coupled with the considerable disposable income for many rearranges the shopping profile for America.Food is becoming, I believe, a way to make a personal statement about your class and status, and it is this trend that food retailers are acting on. What you order when you are out with friends may be a subtext, just like the clothes you wear. Now add in the increasing concern with obesity and other surprising health alarms. Suddenly, you have a different answer to what eating is all about.Significantly raising food prices to fund new ways of managing meat animals is not as unthinkable as it was a few decades ago. Consumer resistance to this could be much less than producers imagine. Still the supply-demand effect suggests that we will eat collectively less, but more expensive protein.The implications are significant. The hog and poultry industries will likely be more frequently and harshly examined in the process, and the cattle industry will not go untouched. Meatpacking will be changed as well. Animal welfare is one part of the cause, but the cumulative effect of other simultaneous market choices will be considerable, I think.There will continue to be an enormous demand for reasonably priced food. But the spectrum of market choices for that food could be vastly different.I cannot help but think that all this turmoil and industry dislocation was partly triggered by the constant complaint emanating from farm country: "People don't know where their food comes from."We got our wish. They found out.

Wednesday, March 28, 2007

Forget the fat tax...One response to the obesity problem in the US is the suggestion to tax unhealthy food, thus steering consumers to better choices.

Popularly known as the "fat tax" or the "Twinkie tax," the concept first gained widespread attention in 1994 when Yale University psychology professor Kelly D. Brownell outlined the idea in an op-ed piece in The New York Times.

Addressing what he called a "dire set of circumstances," Brownell proposed two food-tax options: A big tax, in the range of 7 percent to 10 percent, to discourage the purchase of unhealthy processed foods while subsidizing healthier choices; or a much smaller tax to fund long-term public health nutrition programs. [More]

It sounds reasonable, but likely won't work as well as it might seem.

Americans have been getting fatter since at least the mid 1980s. To better understand this public health problem, much attention has been devoted to determining the underlying cause of increasing body weights in the U.S. Weexamine the role of relative food prices in determining an individual's bodymass index, arguing that as healthful foods become more expensive relative tounhealthful foods, individuals substitute to a less healthful diet. Using datafrom the National Health Interview Survey (NHIS) for the period 1982-1996, wefind that individual BMI measures, as well as the likelihood of being overweightor obese, exhibit a statistically significant positive correlation with theprices of healthful relative to unhealthful foods. These results are robust toendogenizing the relative price measure. While the magnitudes of our estimates suggest that relative price changes can only explain about 1 percent of thegrowth in BMI and the incidence of being overweight or obese over this period,they do provide some measure of how effective fat taxes would be in controlling the obesity epidemic. Our estimates imply, for example, that a 100 percent taxon unhealthful foods could reduce average BMI by about 1 percent, and the same tax could reduce the incidence of being overweight and the incidence of obesityby 2 percent and 1 percent respectively. [Full report]

It is the level of effect that matters in such economic speculation. Sure, higher prices have an effect, but at the level indicated above, not much.I'm not sure how we can push people to better health habits. I think ending first dollar health plans is one way - and we seem to be moving toward that.But the single best "pull" might be the heightened appreciation for good food. As a rule, home prepared meals offer better nutition and especially portion control.Bring home cooking back!

Good news! No, wait...The National Corn Growers have released a report showing corn prices don't have much effect on food prices.

According to the report, if current corn prices recede back to historical levels because of a significant increase in production this year, there would be little or no impact on consumer food prices. The paper concludes that if corn prices remain at the $3.50-4 per bushel range for several years, consumers might experience marginal food inflation for some grocery items.

Whew - at least consumers can't blame corn prices for food price inflation.On the other hand, if corn prices have little effect on food prices, then what is the point of subsidies to corn farmers from the consumer point of view?Could "affordable" food be result of an efficient market and not goverment help?Also note the report assumes prices drop back to "historic levels". That's not what farmers are hoping for, I don't think.

This type of ladybug has been spreading rapidly across the Midwest because some tasty new prey -- the invasive soybean aphid -- has also become widespread. Winemakers report greater concentrations of ladybugs in their vineyards and on harvested grapes. Apparently the bugs are being mixed into the fermenting grape juice by accident.

Sunday, March 25, 2007

Nice work if you can get it...

I was goofing around looking through the career choices for geezers like me and I ran across this idea:

Religious celebrant.

Tending to others' spiritual needs certainly qualifies as a career with "meaning." In addition to traditional ministerial and religious education positions, you can also become a celebrant, someone who helps people mark important events in life with customized ceremonies that reflect their beliefs and backgrounds.

I'm getting a picture of some guy who simply shows up at parties and acts as MC or head druid. And then gets paid.

Like cattle down the loading chute, American farmers are cheerfully being herded to a WTO-compliant (Green Box) "fixed-payment" subsidy. This will prove to be the last gasp, I think, for ag subsidies here. At least, subsidies that affect how we do our job.

Why? Because fixed payments, however generous, will simply become "rent-stamps" for the real power brokers: landowners. Or they will become income streams that can be sold. And if you don't believe me, check out what the single payment system has done in Europe.

The EU pays £60 billion a year in farm subsidies, which were originally aimed at boosting production, but last year farmers were given — free — the automatic right to subsidies, known as the single farm payment entitlement, in return for reducing production. They were also given the right to trade the subsidy entitlements between themselves, but the legislation is so loose that in practice anyone can officially qualify as a farmer. [More]

My current thought is farmers will rejoice at the thought of Social-Security-like checks showing up annually per acre. Especially if told by Congress the total is above the baseline. Then when the viatical industry gets a whiff of this windfall, the results are pretty easy to predict.

To be fair, we didn't know then, but her assertion that pesticides are killing us has had a long, long half-life. Even now, writers blithely toss off statements that our water is fouled with pesticides and pesticides cause all sorts of health problems - all without much evidence.

You'd think in this setting, GM solutions - which greatly reduce the need for pesticides - would be hailed as wonderful solutions.

You'd be wrong.

Nonetheless, the march of GM progress continues to offer potent weapons to attack many of humankind's oldest scourges. One of these is the malaria-carrying mosquito.

After mosquitoes bite a host with malaria, the parasite that causes the disease proliferates in the insect, readying itself to infect the next human victim. It's no fun being infected, and one might think that mosquitoes would have developed a resistance to the malaria parasite over time. But several studies have suggested that mosquitoes engineered to build defenses against malaria are less fit than insects that chose to live with the parasites.

Now there's reason to take heart. Several years ago, a group of medical entomologists at Johns Hopkins University created a strain of Anopheles stephensi (a mosquito that bites rodents) equipped with a gene called SM1 that makes the mosquitoes resistant to infection with Plasmodium berghei, a rodent malaria parasite. In the new study, published online this week in Proceedings of the National Academy of Sciences, the group carried out a series of experiments in which 250 of these insects were put in a cage together with 250 wild-type counterparts and allowed to feed on malaria-infected mice. The resistant insects lived longer and produced more eggs than did those not resistant to the parasite, and after nine generations, some 70% of the population was resistant. The researchers speculate that carrying SM1 is a less costly strategy than whatever defenses malaria-resistant mosquitoes develop in the wild. [More]

I didn't realize it was a parasite and not the mosquito who was the culprit. What I do know is conquering malaria would be close to a miracle for Sub-Saharan Africa.

GM mosquitoes that interfered with development of the malaria parasite would make it more difficult for the organism to become re-established after it had been eradicated from a target area, they said.

Malaria, spread by the single-celled parasite Plasmodium, is endemic in parts of Asia, Africa, and central and south America.

The organism is passed to humans through the bite of the Anopheles mosquito. Each year it makes 300 million people ill and causes a million deaths worldwide.

Some 90% of cases are in sub-Saharan Africa, where a child dies of malaria every 30 seconds. [More]

My point is not to excoriate early environmentalists like Carson, who certainly acted in good faith, and had significant beneficial impact on how we use the tools of technology. But technology does not stand still, and if we cannot revise our decisions in the light of new knowledge, we shall not advance the cause of bettering the human condition.

This it the way, I believe, genetic modification will slowly become a technology we feel comfortable using. Just like steam engines terrified pre-industrialists with their power, GM technology will have a acclimatization period. We should take the time. Launching polemics or trading attacks will not advance this cause.

Standing in the middle of a thunderstorm under a golfer's umbrella, camera at the ready, waiting for the next lighting strike is one of the keys to the creation of Don Naumann's eclectic electric Lightning & Water Photographs. [More]

Those wacky French - guess what they are up to now? By some estimates they could be on the verge of electing a farmer President of France.

Well, Mr. Bayrou is the anti-excitement candidate, a sort of political Prozac after all the amphetamines of the Sarkozy-Royal conflict. He is fairly young at 55, and he has a relatively full head of hair, but so far he has left the paparazzi in a soporific daze. He wants to unite everyone — he’s a member of a centrist party but might well appoint a Socialist prime minister; he is a Catholic but a staunch defender of secularism in schools. The message is that if he can unite God and the atheists, surely he can unite France.

Most of all, he is something that even urban voters see as quintessentially French — a farmer. His official Web site shows him pitchforking hay on the family farm, and he was recently quoted in the weekly Le Point as saying: “My friends and I aren’t the jet set. We’re the tractor set.” [More]

While viewed as unlikely, a Bayrou victory would be an astonishing development even by French standards.

A Bayrou victory, which is unlikely but not impossible, would constitute a triple revolution. It would lead first to the end of the Socialist Party created by Francois Mitterrand. Following former prime minister Lionel Jospin's humiliating defeat in 2002, the Socialists simply would not survive a second consecutive failure to reach the second round.Moreover, a Bayrou victory could signify the end of the conservative party created by Chirac, as well as of Charles de Gaulle's Fifth Republic. But de Gaulle's legacy would most likely be snuffed out gently, with nostalgia for both Mitterrand and Chirac possibly proving very tempting for a people disaffected with the political system but desiring to be reassured. France wants the illusion of change, but is continuity what she truly desires?Finally, while this election was expected to usher in a new generation of politicians, few were prepared to anticipate the peaceful political tsunami that a Bayrou victory would bring. Yet that would be the outcome if the attraction towards the center proves to be as irresistible for significant segments of the Socialists and conservative parties as it now seems. [More]

Our two party system rules out the possibility of a none-of-the-above vote by the electorate - usually we just stay home on election day to signify discontent. As Republicans grovel to the extreme right and Democrats to the left to gain the nomination, the hope is candidates will wander back to the center after the primaries.

Parliamentary systems can actually have centrist candidates, although that seems to insure all the excitement the middle can feature. And Bayrou seems to fulfill those low expectations.

The 55-year-old Catholic, a father of six children and farmer from the southwestern French Béarn region, has figured out how to position himself as an anti-establishment candidate, hero of the common man and antidote to voters' dissatisfaction with the government and politics. Bayrou presents himself as a "peacemaker" who stands above the traditional trench warfare between the right and the left, a struggle that has so far consumed the full attention and energy of the frontrunners. [More]

He is playing the "farmer card" intensely, despite being in government for a considerable career. (Do I hear a Jimmy Carter drawl?)

The outcome in France will likely affect the current economic balance between the dollar and the euro. It will also impact how France deals with their own Islamic question. None of the candidates shows much inclination to adjust hard-line French policies toward farm issues, especially concessions to achieve a WTO success.

I'll be watching this campaign, which ends with the election April 22. What happens in France - despite our disinterest - does matter .

Friday, March 23, 2007

Because they weren't there before...

My admiration for the early American civilizations increased markedly after reading "1491" and hence I was struck by this weird story.

While the world is generally familiar with Machu Pichu and the Nazca Lines, another mystery has come to light through the modern science of satellite photography. This phenomenon is one that was previously known but the extent of its size and effort required to make it is just being fully realized.

A series oh holes, usually about 24 inches across and in neat rows of from nine to twelve, stretched for almost a mile in Peru. It starts at the base of a mountain and then climbs up the side and meanders up and down, over some of the roughest terrain. [More]

We have a tendency to grossly underestimate both the capabilities and intelligence of ancient people. Still, discoveries such as this suggest we ourselves may one day be sadly misunderstood as well.

But the recent announcement by the FOMC (short for "Op Loan Interest Rate Czars") was notable in that, in the face of some inflation pressures, the Fed appears to be opting for growth.One succinct summary was part of my advisory message from Roach Ag Marketing(I carefully ignore advice from several quality sources):

First, it is not what they did that was important but it is what they said that made all the difference. Fed chief Ben Bernanke basically said that he is more willing to consider the fall off in the housing market and the blow up in the sub prime lending market as a more important consideration short term then inflation. Translation: he is likely preparing the market for the potential for rate cuts in the weeks ahead.

The reason this has significance is because it is telling you the Federal Reserve is ready to put the foot on the liquidity pedal and let Japan decelerate its liquidity pump. This lit a fire underneath the equity markets globally yesterday and has a profound impact on the likely acceleration of global growth as we head into the back half of 2007 and especially into 2008. It does not mean that the transition will happen with out some further disruptions but it does mean the Fed is aware of the danger of the yen-carry trade distortion and is looking to minimize, the best that it can, the effects of its eventual unwinding. Have no illusions of grandeur here: Japan will continue to raise rates in the year ahead and the yen-carry trade will unwind from its current amebic state. So expect the yen to strengthen significantly against the dollar and expect the US dollar to stay under pressure against most other currencies as well.

These comments line up well with my own take - in itself a scary thought for the author Shawn Hackett. We are already seeing significant ag inflation: rents, fuel, fertilizer, etc. Now that could be matched with modest consumer inflation: food (of course, that's partly ethanol's fault), anything imported (dollar plummeting), and services.

I have opined before about fixed-rate penalties for ag loans. As you write loans for the machinery now flying out of dealer lots and land you can now almost pay for, make sure you don't lock in a very expensive unneeded interest rate guarantee.

Tuesday, March 20, 2007

Breeding super bugs. Or not...

The issue of antibiotic resistance is a constant wrangle in medical circles that spill over into the animal health arena. Recently, for example the FDA hinted it will approve at new class of antibiotics for use in cattle. Some medicos were not amused.

The government is on track to approve a new antibiotic to treat a pneumonia-like disease in cattle, despite warnings from health groups and a majority of the agency's own expert advisers that the decision will be dangerous for people.

The drug, called cefquinome, belongs to a class of highly potent antibiotics that are among medicine's last defenses against several serious human infections. No drug from that class has been approved in the United States for use in animals. [More]

The bone of contention is the FDA lamely defends the possible move as simply following a directive issued earlier. Regardless, this potential problem is receiving mucho scrutiny.

The irony is at the same time physicians are being warned about over-prescribing antibiotics for stuff like ear infections and now sinus infections. (I thought they were the same thing - at least in my aching head).

Evidence from national databases suggests that both acute and chronic sinus inflammation (sinusitis) is being overtreated with poorly chosen medications, researchers report.

Data from 1999 and 2002 collected by the National Ambulatory Medical Care Survey and the National Hospital Ambulatory Medical Care Survey suggests that there were roughly 14 million visits annually because of chronic sinusitis and 3 million because of acute sinusitis. [More]

It seems more likely to me overuse in humans is way more conducive to resistant bugs than the more torturous chain of events required to produce superbugs that will leap from cattle to humans.

That said, I'm not a big fan of prophylactic dosing of food animals. I know all the other kids are doing it, but I think it may be one reason alternative meats are slowing eating into the high end market share. While cattlemen get all worked up about defending current practice, nimble competitors listen to consumers.

Beef may be in for a wrenching decade or two. Ethanol will steal their feed and rising affluence will make consumers whiny malcontents. Meanwhile, rugged individualism often interferes with their ability to adapt and change, since kowtowing to market signals could be seen as weakness. This is just my read on the dynamic in cattle country, not fact.

BTW, If you aren't reading our newest columnist, Steve Cornett on the Beef Today Blog, you might want to start. He and I don't see eye to eye on every issue, which probably means he is a little sharper than me. His comments on livestock add a new dimension to AgWeb, and I look forward to linking to and agitating him.

Controlling things by mere thought is a staple of science fiction. That fiction, though, is often based on a real technique known as electroencephalography (EEG). This works by deploying an array of electrodes over a person's scalp and recording surface manifestations of the electrical activity going on under his skull. [More]

The idea of replacing joysticks with a plastic helmet is one thing. Ponder what it might be like if we climb into our combines and slap a beanie on and take off.

What happens when you start daydreaming about playing golf? Or eating cheeseburgers? Or Betty Crocker in a cheerleader outfit?

Yaniv Ben-Zaken, a local gas station owner, will be selling Kosher for Passover gasoline during the holiday this year. The move, Ben-Zaken says, has become necessary due to the increased ethanol content in gasoline required by the government. The ethanol is typically derived from corn, which is a forbidden food for Jews on Passover. And, according to Ben-Zaken, underJewish law, it is also forbidden to derive any benefit from corn. [More]

Like most good hoaxes, there is just enough truth to make it stand up for a while. And more than a few cerebral blogs swallowed it whole.

The “article” does get the two points of Jewish law correct. First, we are forbidden on Passover from having any hametz in our possession or ownership and it is forbidden to obtain a benefit from hametz during the eight days of the holiday. Hametz is any of the five forbidden grains (wheat, barley, oats, spelt, rye) that has been in the presence of moisture for more than eighteen minutes.

In Northern European communities around the 15th Century, the prohibition on eating hametz was extended to a category of grains called kitniyot: rice, millet, corn, and legumes. Because ground up rice flour or corn meal closely resembles wheat flour, Ashkenazi Jews exclude kitniyot from their Pesach diet as well. However, as “Rabbi Shalom Silver” is quoted as saying in the article, one may possess kitniyot and obtain a benefit from it, use it in any form or fashion, so long as one does not eat it. Baby powder that contains cornstarch, for example, is perfectly acceptable on Pesach, so long as one is not tempted to make a snack of it. [More of the debunking]

"Kosher ethanol" - ya gotta love it!

Coincidentally, as I have mentioned before, I have been listening to lectures on "The Story of the Bible". We're in the middle of the Middle Ages, so to speak, and one question that has long puzzled me was just answered. Why aren't there many Jewish farmers?

The answer seemed simple: Jews were forbidden to own land for most of the Christian era, and hence never developed a modern agrarian heritage.

Turns out there was more to it than that. Those prohibitions occurred later in the Middle Ages as the Christian Church gained almost absolute power in some areas. The full story was more about education.

So—which Jews stuck with Judaism? Presumably those with a particularly strong attachment to their religion and/or a particularly strong attachment to education for education's sake. (The burden of acquiring an education is, after all, less of a burden for those who enjoy being educated.) The result: Over time, you're left with a population of people who enjoy education, are required by their religion to be educated, and are particularly attached to their religion. Naturally, these people tend to become educated. And once they're educated, they leave the farms. [More of a really interesting article]

Bottom line: the bright ones chose more lucrative careers, the farmers likely dropped out of Judaism.

I wonder if the trend for farming to fail to appeal to our brightest - if not the best - will continue? Or will the technological intensity present a more attractive (and competitive) career?

If you're like me, there may be a tendency for bad things to happen at the dinner table when the butter is straight from the fridge. The effort to cut a chunk of butter has been known to propell dairy products hapahazardly about the dining room.Looks like our probs are solved:

Nobody (including me) is worried about the US trade deficit. One reason is those of us who did worry about it for years have become bored and now worry about other stuff - like global worming. Maybe we don't have to start now, either.

The current account deficit - of which the trade balance is the most important part is bad but improving. One reason is people in poor countries send their money here to invest.

Because emerging economies' supply of financial instruments is so unreliable, people may hoard more of them as a precautionary measure. Firms and households fear they will not be able to borrow to tide themselves over bad times, therefore they choose to save for a rainy day instead. Because they cannot transfer purchasing power from the future to the present, they must store it from the past.

If global imbalances are the result of such frictions, they are unlikely to unwind quickly. Financial systems, after all, do not mature overnight. If Mr Caballero is right, America is also less vulnerable to a sudden run on its securities. Where, he asks, would the excess demand for global assets go? [More]

In short, poor countries don't have a whole range of mutual funds and money market accounts and we do. And outside some bad apples like Enron, you can get your money back someday pretty reliably.

Another reason our trade balance is improving is our dollar is getting cheaper versus other currencies. This is great for ag because it keeps exports humming and mitigates oil prices (imagine if oil was priced in euros!)

After a while, foreign investors may get fed up with getting back less than they invested because of currency fluctuations, but we've been saying that for decades, it seems.

Every now and then the Christian community gets all riled up about some sign indicating the Rapture (Second Coming) is immanent. This happened back in the 70's when various authors, notably Hal Lindsey extracted from Daniel and Revelations prophesies that seemed (to them) to pinpoint the hour of judgment for mankind.

God apparently had other plans, and here we are. But I have noticed all the hubbub about cellulosic ethanol has induced a similar apprehension in many true biofuel believers. "Cellulosic will usurp our hard-won ethanol mandates", they moan. Others worry that within a few years the advantages of cellulosic will make corn ethanol obsolete.

To be sure, cellulosic ethanol does have powerful efficiency advantages. And it can be made from whole bunches of cheap inputs - like garbage and trees.

But for ethanol made from trees, grasses and other types of biomass which contain a lot of cellulose, the energy balance can be as high as 16, at least in theory. In practice the problem is that producing such “cellulosic” ethanol is much more difficult and expensive than producing it from other crops. But the science, technology and economics of treethanol are changing fast. Researchers are racing to develop ways to chip, ferment, distil and refine wood quickly and cheaply. [More]

But I think it's important to read these predictions closely, just like the apocalyptic foretelling of the 70's. For example, notice the sizes of the c-ethanol plants been loudly announced.

The Southern California Biorefinery Project will turn green waste and wood residues at landfills into about 19 million gallons of fuel grade ethanol per year. Additional products that will also be sold include lignin, gypsum, and yeast. BlueFires's current production estimates for the project will be significantly lower that DOE's cellulosic ethanol goal of $1.07/gal in production costs by 2012, and DOE's current estimate of approximately $2.26/gal. [More]

Now contrast 19 million gallons with the 100-million gallon corn ethanol plants starting up about weekly. Next check the press releases for any mention of partnering with feedstock suppliers. Unlike corn ethanol plants which were pushed by corn growers, c-ethanol backers have not bothered to link strongly to sufficient suppliers to create very much of the stuff.

When they do get around to sourcing straw or stover or whatever, my guess is the value of these formerly low-cost feeds will skyrocket. Even corn growers would have to be compensated significantly to gather, handle, store and deliver bales of stover. And then add more fertilizer to compensate.

My view is c-ethanol is one of the great hustles of the energy bubble. If it happens in my lifetime I may live too long.

Years ago I taught Cardio-Pulmonary Resuscitation as a volunteer for the Red Cross. Since then I have noticed the methods have been changed almost annually. Fair enough - rescuers have undoubtedly learned more from actually using the technique.

Well, a BIG change may be coming. Forget the mouth-to-mouth stuff (at least for cardiac arrest).

Forget mouth-to-mouth resuscitation. When somebody collapses in cardiac arrest, experts now say, bystanders should not bother breathing into his or her mouth, once considered a key component of cardiopulmonary resuscitation.

"Rescue breathing is an oxymoron," says Gordon Ewy of the University of Arizona College of Medicine. "We've been doing it wrong for 40 years." [More]

One reason compressions-only has been more successful is the reluctance of bystanders to do full CPR, so no compressions at all were given. Updating the methods taught will also end a standard joke set-up that was worn out years ago. (Bunch of guys - one collapses - all argue about who does the "kiss of life" - etc.)

For a really good demonstration and some pretty straightforward information about how successful resuscitation may be, click here.

Important to remember for farmers: mouth-to-mouth is still imperative for drowning, suffocation, etc. when breathing has stopped first.

Friday, March 16, 2007

In the previous post, I linked to a report on the US savings rate and got a great question: If the savings rate doesn't include retirement accounts, doesn't that skew the results?

Here's one answer:

And another: Every year private pensions pay billions of dollars to retirees that aren't counted on the positive side in the official savings rate.

There is a rationale for this. The government books pensions as personal income when employers contribute it to a pension pool, not when it gets paid out years later, and retirees can actually spend it, said Oak Associates investment strategist Ed Yardeni, another analyst who holds higher-than-average faith in the U.S. consumer. (The idea is to measure income produced by current labor.)

But since the mid-1980s, as the population has aged, and traditional pensions for younger workers have dwindled, pension payouts have vastly exceeded pension inputs, and the gap has been getting wider. "A big discrepancy," Yardeni said.

Pension benefits surpass contributions these days by some $200 billion a year, said Franke. That's $200 billion in household income that doesn't get counted in the official savings accounts. If it were, it would add another 2 percentage points to the savings rate, I figure. [More]

I dunno - whether to include the excess of disbursements over contributions as savings is an accountant call. I'm going to go with the DOC on this one.

Regardless, if we use the same yardstick we can at least measure which way we are going and roughly how fast. My read is down and pretty.

Another point which probably has more effect is capital gains, especially house prices. My feeling is the home price boom became the savings vehicle for most of the US. This seemed like a good strategy until a few months ago.

I think so, if only in comparison to our past and other countries. The point I was making below, is even if we are saving by means of "hidden savings" like our houses, we are certainly spending all the cash we bring home.

Disposable income is wandering around looking for adventure, I think. Maybe it's because many are still hanging their investment hats on residential real estate to solve their retirement needs. One result is we are not saving money - we're spending it.

Even more interesting is what we are spending it on. To be sure, we've gobbling up luxury goods, but it also seems the high-end food business is doing very well.

What we've seen in the food sector recently is the reversal of the deflation occurring elsewhere, in clothing for example,” said Davies. “There is definitely scope for smaller businesses at the high end, catering for niche markets in wealthier areas - of which there are more and more in the UK.” [More]

This is a change for the entire food chain. We have built our business plan around the cost of food, namely, a constant effort to get more food to the consumer at ever lower prices. Suddenly price seems to be less of a consideration for all but the poorest Americans.

This market divergence has many food producers and processors caught looking both ways. The high-end market promises lucrative profits, but how big will it get? Moreover, this sector is notoriously fad-driven, unlike the old meat and potato business. Are big businesses nimble enough to serve it?

One indicator of this new food marketing arena could be stories like the this:

Richard Hebron, 41, was driving along an anonymous stretch of highway near Ann Arbor, Mich., last October when state cops pulled him over, ordered him to put his hands on the hood of his mud-splattered truck and seized its contents: 453 gal. of milk.

Yes, milk. Raw, unpasteurized milk. To supply a small but growing market among health-conscious city and suburban dwellers for milk taken straight from the udder, Hebron was dealing the stuff on behalf of a farming cooperative he runs in southwestern Michigan. An undercover agricultural investigator had infiltrated the co-op as part of a sting operation that resulted in the seizure of $7,000 worth of fresh-food items, including 35 lbs. of raw butter, 29 qt. of cream and all those gallons of the suspicious white liquid. Although Hebron's home office was searched and his computer seized, no charges have been filed. "When they tested the milk, they couldn't find any problems with it," says Hebron. "It seems like they're just looking for some way to shut us down." [More]

The milk business is far from free market. Not merely subsidized, it is strongly regulated, so efforts like this tiny raw-milk niche can may be more threatening to the milk system than the digestive system.

It will be fun to watch if the stream of food-conscious dollars can erode the food industry bulwarks by end-around schemes like this. Then too, there is also the (small) chance that farm policy might get involved in food instead of grain.

Meanwhile, all those who took it as a solid assumption home prices would appreciate a tidy 4-7% annually are faced with a different business plan. Flipping properties, especially for highly leveraged speculators, could be along time regaining profitability.

Could this touch our wonderful little commodity party? I think so, because we have so much "outside" money in commodities tight now.

But as to which way - I have no idea. One thought is commodities will look more attractive by comparison, hence funds will keep buying.

A second choice is as the Dow declines in response the lost equity will suck up money available for commodity speculation. This seems like a reach given the numbers involved, but the slow-motion meltdown in mortgages is not shrinking.

One thing that could be helpful is more pressure on the Fed to lower interest rates to help keep some mortgages going through another wave of refi's similar to a few years ago.

We seem to have a pattern in the US now of slow-motion disasters: Iraq, Libby, Britney, the Chief, and now this.

We're having a blast up here at Miller Electric in Appleton, WI. The three winners of the Farm Journal "Welding University" contest are getting chance to try out some state-of-the-art equipment and have experts help them improve their skills.

To show you what a quantum leap this has been for us, none of us had ever used an auto-darkening hood. Boy howdy - what a difference to these far-sighted eyes! That's $250 I'm definitely going to invest in my welding tool inventory ASAP.

Stan Smith is using the X-treme 375 Plasma Torch. This rascal weighs all of 18 pounds and can cut 1/2 metal easily. None of us had ever used a plasma torch either, like many farmers and hobby metalworkers, and this was eye-opening. Throw in the new trend to small, light tools with inverter technology, and some of us might be able to leverage meager skills up to passable competence.

It is astonishing how technology can ramp up seldom used-skills to acceptable levels. This can be irritating for welders who have taken the time and effort to master the craft, I know. But it also means that amateur metal workers have a wider range of projects they can undertake and repair abilities to save time and hassle.

We'll be showing our experiences on US Farm Report this weekend, and you can read all about it in detail in Farm Journal soon.

Tuesday, March 13, 2007

Wandering trends aren't news to me...

It hard enough in the news business to follow current trends. Extrapolating them to the future can drive you nuts. For example, just when we have all decided Americans will be flooding on-line to get their news, evidence pops up that the trend may be slowing.

When it comes to online news in particular, however, there are clearer signs that the size of the audience has leveled off. That was true both for occasional news consumption and for the percentage of those going online for news more frequently.

As of December 2005, 68% of Americans report ever going online for news, down slightly from the last time this question had been asked by the Pew Internet & American Life Project.

Meanwhile, the percentage of Americans going online for news frequently may not be growing either. In last year’s annual report, we discussed that while the overall online news audience wasn’t growing much, every-day use had increased. [More - same source for following quotes as well.]

Before the industry yells, "It's a trick - retreat!!" we need to notice what else is happening to the news biz. Namely, newspapers aren't exactly pulling out of their nosedive.

In 2006, the traditional indicators were all negative:

*Circulation fell even faster than in 2005 — down 2.8% daily and 3.4% Sunday for the six months ending in September compared to that period a year earlier.3

*Industry revenues were flat, a poor showing in a non-recession year. On the print side, retail, national and automotive classified all showed weakness. Online growth left most companies roughly even in revenues for the year.

*Earnings fell. Wall Street responded by marking shares of publicly traded companies down by about 14%, after a tumble of 20% in 2005.4

*At big metro papers, such as the Dallas Morning News and the Philadelphia Inquirer, there were deep newsroom cuts. Together with some closings of national and international bureaus, the trend was to smaller, local papers with diminished ambitions.

Network TV ended up in a draw, and magazines looked to cross boundaries.

Time, the giant of the news weeklies, took the lead in promising change. It announced a new publication date and a new way of measuring audience that it hoped might soon combine print and online. It redesigned its Web site to de-emphasize the print magazine. It also hinted, more cryptically, at a new editorial approach, one that is more interpretive. Then it slashed more of its staff.

My guess on all this is the first ones to tie them all together will be the winners. One interesting note is since online research is so much easier and reliable, online readership gets much more scrutiny.

It is also critical to deliver news to the right people in the right way. The final product - what I think of as "merged media" - will look like all these traditional sources from some angle, perhaps.

Our sense remains, too, that traditional journalism is not, as some suggest, becoming irrelevant. There is more evidence now that new technology companies have had either limited success in news gathering (Yahoo, AOL), or have avoided it altogether (Google). Whoever owns them, old newsrooms now seem more likely than a few years ago to be the foundations for the newsrooms of the future.

But practicing journalism has become far more difficult and demands new vision. Journalism is becoming a smaller part of people’s information mix. The press is no longer gatekeeper over what the public knows.

Journalists have reacted relatively slowly. They are only now beginning to re-imagine their role. Their companies failed to see “search” as a kind of journalism. Their industry has spent comparatively little on R&D. They have been tentative about pressing for new economic models, and that has left them fearful and defensive. Some of the most interesting experiments in new journalism continue to come from outside the profession — sites such as Global Voices, which mixes approved volunteer “reporters” from around the world with professional editors.

Regardless, we will be inventing the new "news" as we go along. Those of you reading this will help build ag journalism's future format.

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About Me

I am a sixth-generation farmer who hold a degree in Chemical Engineering, a minor in Economics, and served as a nuclear engineer from 1970-75.
Jan, Aaron and I farm 2100 acres near Chrisman, IL. Aaron joined our farm operation in 2008.
I have written humor and commentary for Farm Journal and Top Producer for 20 years. I was the host of US Farm Report from 2005 to 2014, and now serve as Commentator.
I speak often to farm and agribusiness groups on topics from risk analysis to professional development.

About Incoming

Incoming is a collection of current thoughts on the nature of the profession of farming from the perspective of a farmer/writer (see full bio here).

It will soon become obvious to readers I lean to the middle, specifically toward pragmatic libertarianism: preserving individual liberty and responsibility. Another strong influence is my education as an engineer. Now throw in 45 years as a husband, 41 as father, and 30 as a choir director. Not to mention a life of farming.

As for the humor... what can I say? Stuff just strikes me as funny. A lot of stuff, actually.

The Internet has filled a hole in my life I never knew existed. These posts are brief summaries of what I am finding and how I feel it will affect my (our) world.

The opinions are my very own. It was not easy to think them up, and nobody else can be blamed for them. In fact, most people around me brace themselves when I start typing or open my mouth.

I welcome comments. I am exceptionally difficult to offend, and have learned to try to rectify mistakes or errors in judgment as rapidly as possible. And I have had plenty of practice.

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